At my current company, we're experimenting with adding a market rate salary review component to our regular performance review cycle - we have a target salary percentile (based on years of experience, skillset, location, etc with aggregate market data from PayScale) for where we start new hires in a given role, and if for whatever reasons the market shifts upwards and leaves someone on staff below the new-hire percentile, we adjust upwards. We hope that regular pay increases, incentives, etc mean nobody's compensation ever falls lower than market rate after they're hired, but we also want to make sure we have a mechanism in place to correct if it does.

This is a feature we've been asked to add to our salary comparison tool (https://peerwyse.com). The request was to be able to create peer groups that you, as the manager, thought were appropriate peers for your report. Then you would be able to see the probability the report is in the different quintiles.

In the specific context the manager requesting this feature thought their reports were being underpaid and was looking for evidence that they could use to lobby for more.

Our company does market comparisons. It helps, but only for the severely under paid. They have a wide range that they consider acceptable.

Based on what I've seen, one probably has to switch companies.